Carlos Slim Helú (Spanish pronunciation: [ˈkarlos eˈslim eˈlu], Arabic: كارلوس سليم حلو‎) simply known as Carlos Slim (born January 28, 1940), is a Mexican businessman, philanthropist and the chairman and CEO of Telmex, Telcel and América Móvil [3]. As of April 2010, he is the wealthiest person in the world with a net worth of around US$60.6 billion.[4][5] His sons Carlos, Marco Antonio and Patrick Slim Domit run the day-to-day operations of Telmex, Telcel, and América Móvil.

Early life

Slim was born in Mexico City, Mexico.[6] His father, Julián Slim Haddad (Arabic جوليان سليم حداد), a Maronite Christian, immigrated to Mexico in 1902 from Lebanon, alone at 14 years of age and speaking no Spanish. He fled the Ottoman Empire, which at the time conscripted young men into its army. Carlos Slim’s mother, Linda Helú (Arabic ليندا حلو), was born in Parral, Chihuahua. She was the daughter of José Helú and Wadiha Atta (Arabic وضيحة عطا), Lebanese immigrants who arrived in Mexico at the end of the 19th century. They brought the first Arabic printing press to Mexico,[7] and founded one of the first magazines for the Lebanese community in the country. In 1911, Julián established a dry goods store called La Estrella del Oriente (The Eastern Star) and purchased real estate in downtown Mexico City. In August 1926, Julián Slim and Linda Helú married in Mexico City. They had six children, of whom Carlos was the youngest son. Julian died in 1952.[8]

Slim studied engineering at the Universidad Nacional Autónoma de México. By the time he was 26 years old, his net worth was $40 million.[9] He married Soumaya Domit Gemayel (Arabic سمية ضومط جميل), also a Lebanese-Mexican, in 1967. They had six children and were married for 32 years until Domit died of a kidney ailment in 1999. The youngest of their three daughters, Johanna, is married to Arturo Elías Ayub, a board member of some of Slim’s companies.

Personal wealth

On August 4, 2007, The Wall Street Journal ran a cover story profiling Slim. The article said, “While the market value of his stake in publicly traded companies could decline at any time, at the moment he is probably wealthier than Bill Gates”.[10] On March 29, 2007, Slim surpassed Warren Buffett as the world’s second richest person with an estimated net worth of US$53.1 billion compared to Buffett’s US$52.4 billion.[11] According to The Wall Street Journal, Slim credits part of his ability to discover investment opportunities early to the writings of his friend, futurist author Alvin Toffler.[10]

On August 8, 2007, Fortune reported that Slim had overtaken Gates as the world’s richest man. Slim’s estimated fortune soared to US$59 billion, based on the value of his public holdings the end of July. Gates’ net worth was estimated to be at least US$58 billion.[10][12]

On March 5, 2008, Forbes ranked Slim as the world’s second-richest person, behind Warren Buffett and ahead of Bill Gates.[13] On March 11, 2009, Forbes ranked Slim as the world’s third-richest person, behind Gates and Buffett and ahead of Lawrence Ellison.[14]

On March 10, 2010, Forbes once again reported that Slim had overtaken Gates as the world’s richest man, with a net worth of US$53.5 billion. Gates and Buffett now have a net worth of US$53 billion and US$47 billion respectively.[15] He was the first Mexican to top the list.[16] It was the first time in 16 years that the person on top of the list was not from the United States.[17] It was also the first time the person at the top of the list was from an “emerging economy.”[18]

Achievements and directorships

Slim has been vice-president of the Mexican Stock Exchange and president of the Mexican Association of Brokerage Houses. He was the first president of the Latin-American Committee of the New York Stock Exchange Administration Council, and was in office from 1996 through 1998.

He was on the Board of Directors of the Altria Group (previously Philip Morris; he resigned in April 2006) and Alcatel. Slim currently sits on the Board of Directors for Philip Morris International. He was on the Board of Directors of SBC Communications until July 2004 to devote more time to the World Education & Development Fund, which focused on infrastructure, health and education projects. In 1997, just before the company introduced its iMac line, Slim bought three percent of Apple Computer’s stock, which has skyrocketed over the years.

He built the large Mexican financial-industrial conglomerate Grupo Carso which controls, among other companies, Sanborns (a prestigious food chain in Mexico), Mixup (music retail), Sears Mexico, Cigatam, Condumex and Grupo Hotelero Hostam and had indirect control over the CompUSA electronics retail chain.

On December 8, 2007, Grupo Carso announced that the remaining 103 CompUSA stores would be either liquidated or sold, bringing an end to the struggling company.[19] After 28 years he became the Honorary Lifetime Chairman of the business. He is also Chairman of Teléfonos de Mexico, América Móvil, and Grupo Financiero Inbursa.

Slim is said to have shown an interest in buying the Honda Formula One team.[20] Slim would overtake the owner of Force India, Vijay Mallya, to become the richest team owner in a sport famous for being a playground for the super wealthy. Slim made it known in the Mexican press that he will soon announce his intentions to acquire a Major League Soccer franchise to be located in Queens, New York that will initially be set up in the second-tier United Soccer Leagues. [citation needed]

Telecom leadership

Slim gained notoriety when he led a group of investors that included France Télécom and Southwestern Bell Corporation in buying Telmex and Telnor from the Mexican government in 1990 in a public tender during the presidency of Carlos Salinas. Slim was able to raise money for a telecommunications company by purchasing standby letters of credit which enabled him to obtain guaranteed loans which provided the capital. Today, 90 percent of the telephone lines in Mexico are operated by Telmex.[21] The mobile company, Telcel, which Slim also controls, operates almost eighty percent of all the country’s cellphones. These operations have financed Slim’s expansion abroad. Over the past five years, his wireless carrier América Móvil has bought cellphone companies across Latin America, and is now the region’s dominant company, with more than 100 million subscribers. Slim was once MCI Inc.’s largest shareholder, with 13% ownership. On April 11, 2005, The Wall Street Journal announced that he had sold his stake in MCI to Verizon Communications.

Media

On September 10, 2008, Slim announced that he had purchased a 6.4% common-stock stake in The New York Times Company, making him the largest shareholder not related to the company’s owners, the Sulzberger family.[22]

On January 19, 2009, the financially troubled New York Times Company announced that it had accepted a $250 million loan from Slim.[23] While the loan will help ease the company’s cash-flow problems, it does not come close to eliminating the Times Company’s $1.1 billion debt.[23] The company’s continuing financial problems and Slim’s ongoing interest in its work, as evidenced by his two interventions in the course of five months, has led to speculation that he might be contemplating an outright takeover of the Times Company.[24] A spokesman for Slim told reporters in January 2009 that the Times loan was an investment opportunity “that makes financial sense”.[25]

Impulsora del Desarrollo y el Empleo

He leads Impulsora del Desarrollo y el Empleo en America Latina SAB de CV (IDEAL – roughly translated as “Promoter of Development and Employment in Latin America”), a Mexico-based company primarily engaged in infrastructure development. IDEAL is active in transportation, crude oil and gas, power, water, real estate and technology. Within these sectors, the company performs as a concessionaire of highways, hydroelectric plants projects, electronic toll collection systems and ports. It is also engaged in the exploration, production, transport, refinement and distribution of crude oil and gas mainly through offshore oil platforms for deep waters. Additionally, it is engaged in the construction and operation of water treatment plants, investments and development of the urban and rural properties, primarily in the commercial, health and education sectors. The company’s main subsidiaries are Desarollo de America Latina SA de CV and Promotora del Desarollo de America Latina SA de CV.

Criticism

The Mexican magnate’s rising fortune has caused a controversy because it has been amassed in a developing country[citation needed] where per capita income does not surpass $14,500 a year, and nearly 17% of the population lives in poverty.[26] Critics claim that Slim is a monopolist, pointing to Telmex’s control of 90% of the Mexican landline telephone market. Slim’s wealth is the equivalent of roughly 5% of Mexico’s annual economic output.[27] Telmex, which is 49.1% owned by Slim and his family, charges among the highest usage fees in the world, according to the Organisation for Economic Co-operation and Development.[28]

According to Professor Celso Garrido, an economist at the Universidad Nacional Autónoma de México, Slim’s domination of his country’s conglomerates chokes off growth of smaller companies, resulting in a shortage of good jobs and driving many Mexicans to seek better lives north of the Rio Grande.[29]

“When you live for others’ opinions, you are dead. I don’t want to live thinking about how I’ll be remembered”. He also claims indifference about his ranking and says he has no interest in becoming the world’s richest person. When asked to explain his sudden increase in wealth at a press conference soon after Forbes annual rankings were published, he reportedly said, “The stock market goes up … and down”, and noted that his fortune could quickly drop.[27]

Cultural businesses

In 2000, Slim organized the Fundación del Centro Histórico de la Ciudad de México A.C. (Mexico City Historic Downtown Foundation), whose objective is to revitalize and rescue Mexico City’s historic downtown to enable more people to live, work and find entertainment in this area. He has been Chairman of the Executive Committee for the Restoration of the Historic Center since 2001.

The Carlos Slim Foundation sponsors the Museo Soumaya with the most extensive Rodin and Dalí collection in Latin America and one of the largest in the world, as well as renowned religious artworks from colonial times.

Awards

Slim has been awarded the Entrepreneurial Merit Medal of Honor from Mexico’s Chamber of Commerce. He is a “gold patron” of the American Academy of Achievement,[30] a Commander in the Belgian Order of Leopold II, CEO of the year in 2003 by Latin Trade magazine, and one year later CEO of the decade by the same magazine.

History

A Telmex retail store

Telmex was founded in 1947 when a group of Mexican investors bought Swedish Ericsson’s Mexican branch. In 1950 the same investors bought the Mexican branch of the ITT Corporation thus becoming the only telephone provider in the country. In 1972 the Mexican government bought the company, turning it into a government monopoly.

In 1990, Telmex was bought by a group of investors formed principally by Carlos Slim, France Télécom, & Southwestern Bell Corporation, whose tender was the largest. However, controversially, the payment itself took place over the course of the next several years, using money earned by the phone service.

After privatization, Telmex began investing in new modern infrastructure, creating a nationwide fiber optic network, thus offering service to most of the country.

In 1991, the Mexican government sold its remaining stock in Telmex.

Although Telmex is now a private company it stills remains as a quasi-monopoly. There are few other telephone companies in Mexico, Alestra (formerly AT&T), Axtel, Maxcom, Megacable and Cablecom. Telmex is the 2nd most complained-about provider in PROFECO (Mexico’s Consumer Commission).

Telmex Cellphone Mobile Unit

A Telmex pay phone

In the 1990s mobile telephones were becoming popular among the general population. The early market leader was Iusacell, and Telmex had no presence in the market. This prompted Telmex to form a subsidiary to provide mobile communications. The subsidiary was Radio Móvil Dipsa, and offered service under the brand Telcel. Telcel started out in a distant second place in its mobile market, but in 1995 everything changed, when the Mexican Currency Crisis hit many Mexicans hard. Iusacell decided to stay with wealthier customers, offering expensive plans, whereas Telcel began to offer the first prepaid mobile phone plans. Although, in effect, just as expensive as the contracts offered by Iusacell, the success of its prepaid plans ultimately provided Telcel the growth needed to become the leader in the mobile market within two years.

In 2000, Telmex spun off their mobile unit, creating América Móvil, which controls Radio Móvil Dipsa and would be free to develop as its own business as an independent entity. It started with 80% of the mobile market. Some people incorrectly continue to believe that América Móvil is part of Telmex. Instead, both are sister companies under parent Carso Global Telecom. Carso Global Telecom is itself a sister conglomerate of Grupo Carso.

Internet

In the mid-1990s Telmex began providing Internet access as an Internet Service Provider with the brand Uninet. A year later, the brand was changed to Telmex Internet Directo Personal (Telmex Direct Personal Internet). In 1996, Telmex bought Prodigy Communications and took the brand to Mexico, renaming the service Prodigy Internet de Telmex. Thanks to their national coverage, Telmex rapidly became the leading national ISP. As of 2005, Telmex holds more than 80% of the market as ISP, and is also the leader in broadband access with its brand Prodigy Infinitum (ADSL). [2]
In 2001, Telmex sold the U.S. branch Prodigy Communications to SBC, which was dubbed SBC Prodigy. However, Telmex continues to own and operate Prodigy in Mexico.

In 2004 Telmex claimed that the number of users of Prodigy Internet grew by 190%.

Long Distance Competition

In the mid 1990s, AT&T and WorldCom (MCI), among others, began operating in Mexico, representing for the first time serious competition to Telmex. However, due to Telmex’s incumbent monopoly position and well-developed infrastructure and coverage, none of them were believed to pose much threat to Telmex.

Expansion

After spinning off América Móvil, Telmex started an expansion plan, which started with the purchase of Guatemala’s Telgua. Later, Telmex bought former state owned phone companies in Central America, and began operations in the USA with Telmex USA.
In 2004, Telmex went into a shopping spree for undervalued operators in South America, including the purchase of AT&T’s Latin American operations, giving it presence in Colombia, Peru, Chile, Argentina, Brazil, and Uruguay, and increased reach in the United States. In the same year, Telmex bought from MCI Brazil’s largest and most important long distance operator, Embratel, acquired Chile’s Chilesat, took control of Argentina’s Techtel (operating in Argentina and Uruguay), of which it already owned 60%, by purchasing the remaining 40% from the Techint group, and purchased Argentina’s Metrored. In the USA, Telmex bought 13.4% of bankrupt MCI.

At the same time, sister company America Movil pursued a similar strategy by acquiring cellular operators CTI Movil in Argentina and Uruguay, Claro in Brasil and Perú, Porta in Ecuador and Comcel in Colombia.

In 2005, Telmex sold its holdings in MCI to Verizon.

As of January 2006, Telmex continues buying assets in Latin America and in the USA.

In March 2006, there were rumors of Telmex was buying Verizon operations in the Caribbean. The reports said that the operation can include the wireless operation on each market. The total amount of this sell is estimated nearly $300 usd millions.

In December 2006 Telmex announces agreement to acquire TV CABLE and CABLE PACIFICO in Colombia. TV Cable offers cable TV , Internet and Voice over IP services and has been in operation for 20 years. Currently, the company serves 164,000 homes in Bogotá and Cali. Cable Pacifico serves 9 States and its main operation is in Medellín. To date, Cable Pacifico has approximately 100,000 subscribers.

In January 2007 America Movil bought the Verizon operations in Puerto Rico, and days later Telmex and America Movil announced that their equally-owned joint venture had agreed with Verizon Communications Inc. (“Verizon”) to terminate the joint venture’s agreement to acquire Verizon’s indirect equity interests in Compañía Anónima Nacional Teléfonos de Venezuela (CANTV); subsequently, all of Verizon’s holdings in CANTV were acquired in May 2007 by the Venezuelan government, reaching 86.2% of its total shares.

In January 2007, Telmex launched Prodigy Media, the first step to offer triple play services to the Mexican market. Days later Telmex started the first Wi-Max network in Chile offering local, long distance and internet services to the 98% of the Chilean population.

In March 2007, Telmex bought Ecutel in Ecuador a small telecommunications company that offers services to the Corporate market.

In April 2007, Telmex announces agreement to acquire CABLECENTRO and SATELCARIBE in Colombia. CABLECENTRO offers cable TV and Internet access services and has been in operation for 7 years. Currently, the company operates in more than 50 cities in Colombia including Bogota, Cucuta, Bucaramanga, Ibague and Neiva, among others. SATELCARIBE offers cable TV and Internet access services and has been in operation for 7 years. Currently, the company operates in more than 15 cities in Colombia including Cartagena, Santa Marta, Valledupar, Sincelejo and Monteria.

In December 2007, Telmex transferred its Latin American and yellow pages directory businesses to a new, separate entity, Telmex Internacional.

America Movil Take Over

In January 2010 America Movil the largest mobile phone company in Latin America made an offer to buy Telmex and Telmex International in order to better compete against Spain’s Telefonica, the acquisition was approved by the CFC (Comisión Federal de Competencia) Antitrust Office in Mexico on February 11, 2010.

America Movil was once the mobile arm of Telmex, but since 2001 America Movil was split off and grew bigger than the former parent company.[1]

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